As a business owner, you may have found yourself wondering “why do we need insurance?” Depending on the type of business you run, paying for insurance every month may not make a lot of sense to you.
However, we can assure you, your business absolutely needs insurance. It’s in the best interest of you, your family, your business, any employees you have, and even your customers.
There are many perks and benefits that come along with having business insurance, and we’re here to tell you all about them.
Keep reading for 9 reasons you need insurance.
Why Do We Need Insurance as Business Owners
Comparatively, business insurance isn’t incredibly expensive, especially if you pay attention to what it can save you down the road. Aside from affordability, you may be surprised to learn just how many benefits there are to having business insurance.
Depending on what type of business you own and operate and how you do it, some of these scenarios may not apply. However, we guarantee most of them will!
1. Protect Your Assets
Why do we need insurance is we don’t have products?
One of the most important reasons we need business insurance is to protect the foundation on which our business is based on. In other words, business insurance protects our assets.
If you own a retail store, it covers your products in case of theft, fire, natural disaster, etc.
If you own a manufacturing company, business insurance will cover the inventory you create and the equipment you use to create it. If you own a taxi cab service, insurance will protect your vehicles. If you own a gym, it covers all of your gym equipment.
The list goes on and on, but you get the point. If not, here it is: operating any sort of business without business insurance is foolish, to say the least. It may turn out to be the worst mistake you could ever make.
2. Protect Your Property
Along with protecting your assets, another reason why we need business insurance is to protect our properties. It provides coverage for the buildings we do business out of. Most of us can’t do business without a location!
Having property protection covers your place of business in the event of flooding, fires, hurricanes, earthquakes, vandalism, etc.
Without business insurance, one act of God could put you out of business permanently.
3. Protect Your Employees
For some of us, one of the reasons why we need business insurance is to cover our employees. As employers, we need insurance for multiple reasons.
First, we need to have worker’s comprehension insurance. This provides the funds and covers us in the event that an employee files for worker’s comp.
Second, if our business were to experience a catastrophic disaster, business income insurance would help cover income costs while things are being put back in order.
Finally, state unemployment insurance will help your business cover the cost of employees who lose their jobs because of circumstances outside of their control.
4. Protect Your Customers
Why do we need insurance for our customers or clients?
Depending on the type of business you have, business insurance may protect you and your customers in the event that they are harmed on your property or while partaking in the services you offer.
For example, if you own and gym and a member is injured tripping over a barbell, your business insurance can cover their hospital bills. Otherwise, it could be taken out of the company’s pocket (i.e. your pocket).
5. Protect Your Business
When most of us think about why we need business insurance, we often immediately jump to lawsuits. It’s an unfortunate, but very real part of doing business. In fact, 100 million lawsuits are filed each year in America.
To protect your business in the unfortunate scenario of finding yourself facing a lawsuit, you must have business insurance.
Your business is vulnerable from every angle. Upset employees, angry customers, failed business affiliations, etc. Don’t leave your business vulnerable, a lawsuit for an uncovered business could mean its termination.
6. Protect Your Intellectual Property
What is intellectual property and why do we need insurance for it?
In the current age of ever-advancing technology, more and more business is happening online. Therefore, the creation of intellectual property insurance has become a necessity.
Intellectual property includes anything that is the result of artistic design, creativity, branding, etc.
Most often intellectual property insurance covers you in the event that you come under fire for violating someone else’s copyrighted material. This defense coverage may be the difference between a quick settlement (covered by insurance) or the death of your business.
You can learn more about the types of business insurance in this article by SEOgine.
7. Protect Your Personal Well-Being
One of the most convincing why we need business insurance presents itself in our personal lives.
Most of us have families, houses, cars, and other personal interests and assets near and dear to our hearts. As business owners, we’re not guaranteed a paycheck. Our livelihood depends entirely on the performance of our business.
As such, any devastating event that happens to our business impacts us on a personal level as well. Having business insurance will not only soften the blow, but it can also protect us entirely.
8. Business Contracts May Require Insured Service Providers
Why do we need insurance for business contracts?
The reality is, most companies and consumers feel better about doing business with us if we do. In fact, on a professional level, many companies won’t work or make a contract with you if you don’t have insurance. You could be losing out on a ton of business.
They don’t want to risk harm to their business if something falls through on your end and you aren’t covered.
9. Operating a Business Without Insurance Is Illegal
Finally, and perhaps most importantly for your business, it’s actually considered illegal not to have business insurance in certain circumstances.
Therefore, if you want to keep doing business, you must have it.
Most of these laws apply only to businesses with employees. However, your city or state may be able to penalize you for failing to have insurance depending on your business.
Don’t Risk It
Why do we need insurance?
Because at the end of the day, business insurance is pretty inexpensive. Additionally, the repercussions of not having it could be devastating to not only your business but your personal life too. It could effectively kill your business and leave you without an income.
If you are starting a business or are already running one without insurance, you’re risking everything! Start looking for business insurance today!
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